Key benchmark indices surged as a strengthening rupee boosted sentiment. The rupee strengthened against the dollar after Foreign Minister Salman Khurshid said in an interview to a business channel that the oil minister will on 16 September 2013 announce plans for lowering fuel consumption. The barometer index, the S&P BSE Sensex, hit over 3-week high above the psychological 19,000 mark. The 50-unit CNX Nifty also hit over 3-week high. The Sensex jumped 290.30 points or 1.53%, up about 340 points from the day's low and off close to 25 points from the day's high. The market breadth, indicating the overall health of the market, was positive.
Indian stocks gained for the third straight day today, 6 September 2013. The Sensex has garnered 1,035.40 points or 5.67% in three trading days from a recent low of 18,234.66 on 3 September 2013. The Sensex has gained 650.34 points or 3.49% in September 2013 so far (till 6 September 2013). The Sensex has declined 156.65 points or 0.8% in calendar 2013 so far (till 6 September 2013). From a 52-week high of 20,443.62 on 20 May 2013, the Sensex has fallen 1,173.56 points or 5.74%. From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 1,821.35 points or 10.43%.
Coming back to today's trade, PSU OMCs and upstream oil companies gained after Foreign Minister Salman Khurshid's comments that the oil minister will on 16 September 2013 announce plans for lowering fuel consumption. ICICI Bank jumped.
The market sentiment was boosted by data showing that foreign funds remained net buyers of Indian stocks on Thursday, 5 September 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 1107.50 crore from the secondary equity markets on Thursday, 5 September 2013, as per the data from the Securities & Exchange Board of India (Sebi).
In the foreign exchange market, the rupee strengthened against the dollar after Foreign Minister Salman Khurshid said in an interview to a business channel that the oil minister will on 16 September 2013 announce plans for lowering fuel consumption. The partially convertible rupee was hovering at 65.18, stronger than its close of 66.01/02 on Thursday, 5 September 2013.
"No matter what happens, we will have to cut down on fuel consumption. You can't keep subsiding costs of fuel and not restrict the use of the fuel," Khurshid said. He said that increasingly people are realising the "inevitability" of moving away from government-controlled prices. "That's beginning to happen, but has political implications," he said.
A sharp slide in rupee this year and higher crude oil prices have triggered concerns about increase in India's fiscal deficit and current account deficit. India imports about 80% of its crude oil requirements.
Meanwhile, India and Japan today, 6 September 2013, announced that they have decided to expand a bilateral currency swap facility to $50 billion from $15 billion. The announcement was made after bilateral talks on the sidelines of a Group of 20 summit.
The stock market remains closed on Monday, 9 September 2013, on account of Ganesh Chaturthi.
The S&P BSE Sensex jumped 290.30 points or 1.53% to settle at 19,270.06, its highest closing level since 14 August 2013. The index jumped 314.20 points at the day's high of 19,293.96 in late trade. The index fell 50.38 points at the day's low of 18,929.38 in morning trade.
The CNX Nifty jumped 80.65 points or 1.44% to 5,673.60, its highest closing level since 14 August 2013. The index hit a high of 5,688.60 and a low of 5,566.15 in intraday trade.
The BSE Mid-Cap index rose 0.57% and the BSE Small-Cap index gained 0.63%. Both these indices underperformed the Sensex.
The total turnover on BSE amounted to Rs 2081 crore, higher than Rs 2062.18 crore on Thursday, 5 September 2013.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,311 shares rose and 996 shares fell. A total of 146 shares were unchanged.
Among the 30-share Sensex pack, 19 stocks rose and rest of them fell.
Maruti Suzuki India fell 1.06%. The company said during market hours today, 6 September 2013, that its production jumped 62.63% to 91,261 units in August 2013 over August 2012. The company said on 2 September 2013 that its total sales spurted 61.2% to 87,323 units in August 2013 over August 2012. Domestic sales rose 51.6% to 76,018 units in August 2013 over August 2012. Exports spurted 180.9% to 11,306 units in August 2013 over August 2012.
PSU OMCs and upstream oil companies gained after Foreign Minister Salman Khurshid said in an interview to a business channel that the oil minister will on 16 September 2013 announce plans for lowering fuel consumption. HPCL (up 5.06%) and Indian Oil Corporation (up 4.18%), edged higher.
BPCL rose 3.79%. The stock turned ex-dividend today, 6 September 2013, for dividend of Rs 11 per share for the year ended 31 March 2013.
PSU OMCs suffer under-recoveries on domestic sale of diesel, LPG and kerosene at controlled prices. In January 2013, the government allowed PSU OMCs to raise diesel prices in small measures at regular intervals while completely deregulating diesel prices sold to institutional or bulk buyers. The government has already freed pricing of petrol.
Among upstream oil companies, Oil India (up 2.45%), ONGC (up 5.52%) and GAIL (India) (up 1.55%), gained.
Three state-run upstream oil firms -- Oil India, ONGC and GAIL (India) -- share the under recoveries of state-run oil marketing companies (PSU OMCs) by allowing discount in the prices of crude oil, PSD kerosene, and domestic LPG based on the rates of discount communicated by the Ministry of Petroleum and Natural Gas and the Petroleum Planning and Analysis Cell. Lower fuel consumption could reduce subsidy burden of these three state-run upstream oil firms.
Metal and mining stocks rose on positive Chinese economic data this week. China is the world's largest consumer of copper and aluminum. Bhushan Steel (up 4.98%), Jindal Steel & Power (up 2.99%), Hindustan Zinc (up 1.53%), Tata Steel (up 1.21%), Hindalco Industries (up 0.14%) and JSW Steel (up 2.99%), edged higher.
Sesa Goa fell 1.1% to Rs 175.45 as shares allotted by the company to the shareholders of Sterlite Industries (India), The Madras Aluminium Company and Ekaterina pursuant to the Schemes of Amalgamation and Arrangement were admitted to trading on the bourses. The stock was volatile. The scrip hit high of Rs 182.25 and low of Rs 168.30. A total of 209.55 crore shares of Sesa Goa were admitted to trading on the bourses today, 6 September 2013.
Telecom stocks surged on reports that the Telecom Regulatory Authority of India (TRAI) board which is due to meet today, 6 September 2013, to consider spectrum pricing may suggest slashing of spectrum prices by as much as 75% for 800 MHZ and 900 MHZ spectrum in the upcoming auction. Bharti Airtel (up 5.47%), Idea Cellular (up 2.86%), and Tata Teleservices (Maharashtra) (up 4.85%), gained. After a lukewarm response in the previous auctions in November last year and March this year, the government had mandated TRAI to work out fresh reserve price for the auctions in order to elicit greater participation from operators, most of whom had cited higher reserve price for non-participation earlier.
TRAI may also recommend spectrum trading and sharing, reports suggest.
Reliance Communications edged higher after the company said at the time of appointment of CEO of its India Enterprise Business that it expects 30% growth in revenue and profits of the division per annum over the next 5 years. The stock was up 2.61%.
Reliance Communications (RCom) today, 6 September 2013 ,announced the appointment of Mr. Deepak Khanna as CEO of its India Enterprise Business. Mr. Khanna, a MBA from the Symbiosis Institute of Management Studies, Pune, has rich and varied experience of 25 years, of which the last 15 years have been in the telecom sector, a statement from Reliance Communications (RCom) said. Prior to joining RCom, Deepak has worked in leadership roles with Bharti Airtel and Tulip Telecom in this space.
Assuming his new responsibilities at the RCom campus in Navi Mumbai, Deepak said: "Reliance is ideally positioned in the enterprises domain, already serving over 45,000 large, medium and small enterprises, including nearly 850 of the top 1,000 corporates in India. We are committed to enhancing our market leadership, working as strategic partners with our valued enterprise customers, delivering a suite of world class products accompanied by flawless execution. We see exciting growth potential in the enterprise business in the years ahead, and expect to register 30% per annum compounded growth in this space in both, revenues and profitability over the next 5 years."
Shares of select public sector companies were in demand. Engineers India (up 19.3%), State Trading Corporation of India (up 7.68%), Shipping Corporation of India (up 7.54%), MMTC (up 9.92%), Dredging Corporation of India (up 4.99%), and Power Grid Corporation of India (up 2.75%) edged higher.
Most pharma stocks gained on renewed buying. Ranbaxy Laboratories (up 1.11%) and Sun Pharmaceutical Industries (up 2.03%), gained. Dr Reddy's Laboratories fell 0.41%.
Cipla rose 4.49% to Rs 437.60 after hitting a record high of Rs 440.20 in intraday trade today, 6 September 2013.
Fortis Healthcare rose 0.31% after the company announced the successful completion of the preferential allotment of 37.37 lakh equity shares to Standard Chartered Private Equity Mauritius III. The announcement was made after market on Thursday, 5 September 2013.
In the last phase of this current fund raising program, Fortis Healthcare on Thursday, 5 September 2013, completed the preferential allotment of 37.37 lakh equity shares at Rs 99.09 per share to Standard Chartered Private Equity Mauritius III (SCPE). SCPE/entities acting in concert with SCPE, had previously invested in the institutional placement program (IPP) of the company and have also recently intimated to the stock exchanges that they are the key investor in the public issue of FCCBs that the company listed on the Singapore Stock Exchange (SGX) in July 2013. With this the cumulative investment by SCPE in the company is estimated to be approximately Rs 250 crore, Fortis said in a statement.
Fortis has cumulatively raised Rs 1040 crore, this year, through equity and equity linked instruments, gaining from the confidence of globally recognised strategic and financial investors in its future plans, amidst tight liquidity conditions. The International Finance Corporation (IFC), a key strategic investor with a long term horizon and commitment to healthcare has so far invested approximately Rs 570 crore in the company through the institutional placement program (IPP) in May 2013, the preferential allotment of equity shares and subscription to the company's FCCB issuance-both made during June 2013, Fortis said in a statement.
Mr. Vishal Bali, Group CEO, Fortis Healthcare, said: "We are pleased to have on board long term strategic investors like IFC and SCPE who believe strongly in the long term growth potential of the company. The healthcare sector in India is poised for significant growth, and Fortis Healthcare is ready to capitalise on emergent opportunities by continuing to provide world-class healthcare to patients in India. The current series of fund raising measures have been successfully completed and make the company stronger, creating room for further debt reduction and expansion."
Fortis, during the year, has also brought in a sharper focus on geographies and verticals which present relatively stronger growth opportunities. Re-enforcing this position, it has also divested its businesses in Australia and Vietnam and continues to evaluate its current portfolio of international assets to ensure the right strategic fit, the company said.
Fortis said it continues to strengthen its balance sheet, with a net debt to equity at 0.7x as on 30 June, 2013 substantially lower as compared to a net debt to equity of 1.6x as on 30 September 2012. This is expected to show a further improvement with a target to reach a net debt to equity of no more than 0.5x in the near future, Fortis said in a statement.
Coal India declined 2.12% as the stock turned ex-dividend today, 6 September 2013, for final dividend of Rs 4.30 per share for the year ended 31 March 2013.
GAIL (India) gained 1.31%. Rashtriya Chemicals & Fertilizers (RCF) rose 0.33%. Fertilizer Corporation of India (FCIL) on Thursday signed a memorandum of understanding (MoU) with Coal India (CIL), GAIL (India) and Rashtriya Chemicals & Fertilizers (RCF) for revival of FCIL's Talcher urea plant in Odisha. The MoU was signed in presence of Union Minister of Petroleum & Natural Gas, Shri Veerapa Moily, Minister of Coal, Shri Sriprakash Jaiswal and Minister of State (I/C) for Chemicals and Fertilizers, Statistics & PI, Shri Srikant Kumar Jena. On the occasion, Shri Srikant Kumar Jena said that today is a historic day for the country, in particular for the people of Odisha, as the Talcher Unit of FCIL is being revived by a consortium of RCF, CIL, GAIL & FCIL at an estimated cost of about Rs 8000 crore. He said that it is a unique project being setup on Coal Gasification for production of 1.2 million tonnes per annum (MTPA) Urea and Ammonium Nitrate. CIL shall supply about 5 million tons per annum of coal for this project.
Shri Jena informed that it has been decided to form two separate Joint Venture (JV) companies for the proposed revival. JV-1 would take up upstream coal gasification and gas purification with GAIL having major stake. JV-2 would take up down-stream Urea-cum-Ammonium Nitrate Complex & Off-sites, including power plant & coal washery and will have major stakes of RCF & CIL with minor stake by FCIL & GAIL, the Minister added.
The pre-project activities for revival of Talcher project have already started. The project will not only reduce the dependence on imported urea but shall also utilize indigenously available feedstock. The project is expected to be commissioned by 2017.
Capital goods pivotals gained. Shares of L&T gained 2.58%.
Bharat Heavy Electricals (Bhel) rose 3.17%. The stock turned ex-dividend today, 6 September 2013, for final dividend of Rs 3.29 per share for the year ended 31 March 2013.
PSU bank stocks fell and private bank stocks rose after Thursday's sharp rally triggered by a number of favourable announcements for the banking and financial sector made by the new Reserve Bank of India (RBI) chief Raghuram Rajan on Wednesday, 4 September 2013. Among the key announcements, the new RBI governor said that RBI will shortly issue the necessary circular to completely free bank branching for domestic scheduled commercial banks in every part of the country. He also said that there is need to reduce the requirement for banks to invest in government securities in a calibrated way so as to ensure the flow of credit to the productive sectors of the economy.
Among PSU bank stocks, State Bank of India (down 0.18%), Bank of Baroda (down 2.81%), Canara Bank (down 2.56%), Union Bank of India (down 2.36%), and Bank of India (down 0.07%), edged lower.
Shares of private banks extended Thursday's gain. Yes Bank (up 1.88%), Kotak Mahindra Bank (up 2.18%), Federal Bank (up 2.44%), and HDFC Bank (up 1.24%), edged higher.
ICICI Bank jumped 7.37%, with the stock extending Thursday's 9.2% gain.
Aviation stocks rallied as airlines in India recently announced a steep hike in airfares to mitigate the impact of the sharp fall in the rupee and surge in jet fuel prices. Jet Airways (up 6.8%), Kingfisher Airlines (up 10%), and SpiceJet (up 2.66%), edged higher.
State-run Air India on Thursday, 5 September 2013, hiked passenger fares by 23% to 25% on all domestic routes on the back of sharp jump in fuel price. Jet Airways had on Wednesday, 4 September 2013, announced increase in fares by up to 25%. Budget carrier SpiceJet recently increased fares by 25%.
The price of jet fuel or aviation turbine fuel (ATF) was hiked by a steep 6.9%, taking the rate to Rs 75,031 per kilolitre (KL) from 1 September 2013. This hike had come on the back of two rounds of ATF price hikes effected in July and August by oil marketing companies. ATF prices were increased by 5.8% on July 1 and by another 6.3% on August 1.
ATF or jet fuel constitutes more than 50% of operating cost for airliners. Prices of jet fuel are directly linked to crude oil prices.
The Reserve Bank of India said on Thursday that it will release the next Mid-Quarter Review of Monetary Policy 2013-14 at 11 IST on 20 September 2013 instead of 18 September 2013 as indicated in the First Quarter Review of Monetary Policy 2013-14. This will be followed by Governor Dr. Raghuram Rajan addressing the media in the afternoon.
European stocks edged lower in choppy trade on Friday, 6 September 2013, as investors awaited nonfarm-payrolls data from the US to gauge whether it'll strengthen or weaken the case for the Federal Reserve to taper its asset purchases. Key benchmark indices in UK, France and Germany were down by 0.09% to 0.16%.
UK manufacturing production rose for a second month in July, adding to signs of an accelerating economy that has led investors to bet the Bank of England will increase interest rates earlier than it has projected. Factory output rose 0.2% from June, when it gained 2%, the Office for National Statistics said today in London.
German exports unexpectedly fell in July, even as a recovery gathered pace in the 17-nation euro area, its biggest trading partner. Exports, adjusted for working days and seasonal changes, fell 1.1% from June, when they gained 0.6%, the Federal Statistics Office in Wiesbaden said today.
European Central Bank on Thursday indicated recent improvements in the euro zone's economy haven't been strong enough for a pullback from the bank's easy monetary policies. While the ECB's Governing Council left its benchmark lending rate unchanged at 0.5% at its meeting Thursday, ECB President Mario Draghi said policy makers had discussed lowering the rate. He also said inflation expectations are contained, which will give the central bank room to hold off on raising rates for some time.
The Bank of England also on Thursday offered no surprises, leaving the size of its bond-buying program unchanged and holding its key lending rate at a record low of 0.5%, where it has stood since March 2009. The central bank's Monetary Policy Committee left its asset purchases, the centerpiece of its quantitative-easing strategy, at 375 billion pounds ($585 billion). The minutes from the September 4 meeting will be published on September 18. The central bank has said it aims to keep rates low at least until the UK unemployment rate drops below 7%, which it doesn't expect will happen until 2016.
Most Asian stocks gained on Friday, 6 September 2013, extending a six-day advance as investors await the monthly American jobs report later in the global day. Key benchmark indices in China, Hong Kong, Indonesia, South Korea, and Singapore rose by 0.19% to 0.83%. Key benchmark indices in Taiwan and Japan shed by 0.06% to 1.45%.
Trading in US index futures indicated that the Dow could fall 15 points at opening bell on Friday, 6 September 2013. US stocks on Thursday climbed for a third consecutive session, with the Dow Jones Industrial Average posting its longest winning run since the middle of July, as investors looked to the government's monthly jobs report. Claims for US unemployment benefits declined by 9,000 to 323,000 in the week ended August 31, less than the estimates. Another report showed companies boosted employment by 176,000 workers in August, according to the ADP Research Institute.
The influential US nonfarm payroll report for August 2013 is due for release today, 6 September 2013. The employment numbers will be keenly watched given the implications for the timing of the Federal Reserve's plan to begin slowing the pace of its monetary stimulus.
Investors across the globe are eyeing the next policy meeting of the Federal Open Market Committee (FOMC) scheduled this month, with their focus squarely on the timing of tapering of Federal Reserve's bond purchases. The FOMC holds a two-day policy meeting on 17-18 September 2013 to decide on interest rates in the United States. The US central bank currently buys $85 billion a month in US debt and mortgage-backed securities in a bid to hold interest rates low and encourage economic growth. Federal Reserve Chairman Ben Bernanke has on several occasions stressed that the tapering process is dependent on an improvement in data. Fed's bond-buying program has kept global markets flush with liquidity in recent years.
Leaders of the world's biggest economies at a Group of 20 summit in Russia grappled with threats to the global economy as the effects of the Syrian conflict added to the fallout from a potential stimulus exit. The BRICS countries pledged yesterday in St. Petersburg to create a $100 billion pool of currency reserves to guard against shocks even as Russia said US President Barack Obama sought to ease concern about an abrupt pullback. China will contribute $41 billion to a pool of BRICS reserves, with Russia, India and Brazil each adding $18 billion and South Africa providing $5 billion, according to a statement issued yesterday. The BRICS countries, which also agreed to seed a new development bank with $50 billion of capital, are seeking a shield against unintended negative spillovers from unconventional monetary policies in developed economies, according to the statement.
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